South Korean shares finished marginally higher on Tuesday, as foreigners continued to scoop up stocks amid an eased risk-off mood. The South Korean won fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index gained 2.69 points, or 0.14 percent, to 1,991.23.

Trading volume came to 427.4 million shares worth 4.4 trillion won ($3.8 billion), with gainers outnumbering losers 413 to 368.

Foreigners net-purchased 192 billion won worth of shares, while individuals and institutional investors sold a net 194 billion and 48 billion won worth of stocks, respectively.

The main index was choppy, a day after it jumped 0.83 percent from the previous session.

The market was apparently encouraged by strong U.S. job data and Japanese Prime Minister Shinzo Abe's call for a new round of fiscal stimulus spending.

But its gains were limited on geopolitical risks from South Korea's decision to allow the U.S. to deploy the THAAD missile defense system on its soil despite fierce opposition from North Korea and China, analysts said.

"A sense of vigilance is necessary as the KOSPI's fluctuations may widen due to the decision to deploy THAAD," Kim Jin-young, an analyst at the NH Investment & Securities Co., said. "There is a likelihood that political tensions will continue for a considerable time, given that China has expressed a strong negative view (of the THAAD decision) and it's locked in a stand-off with the U.S. in the South China Sea."

Kim Sung-hwan, a researcher at Bookook Securities Co., also said a THAAD in Korea is feared to trigger the massive outflow of Chinese capital, a freeze in the Korean Wave and Beijing's economic retaliation both directly and indirectly.

Steel, transport and financial industries were bullish, while tech and medical ones underperformed.

Market behemoth Samsung Electronics Co. dropped 1.68 percent to 1,464,000 won, while leading automaker Hyundai Motor Co. rose 0.76 percent to 132,000 won.

POSCO, the nation's No. 1 steelmaker, jumped 2.66 percent to 212,500 won and Hyundai Mobis Co., a major automotive parts supplier, added 2.14 percent to 262,000 won.

STX Heavy Industries Co., a ship engine components maker, soared 29.91 percent to 5,690 won.

The local currency closed at 1,148.55 won against the U.S. dollar, down 1.3 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 0.4 basis point to 1.217 percent and the return on the benchmark five-year government bond also gained 0.3 basis point to 1.239 percent. (Yonhap)